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Fraud control fail

A director with a Calgary college was fired last fall for an alleged fraud worth $189,000 and an Edmonton college has had ineffective controls in place for years to catch frauds, Alberta’s auditor general unveiled yesterday.

A director with a Calgary college was fired last fall for an alleged fraud worth $189,000 and an Edmonton college has had ineffective controls in place for years to catch frauds, Alberta’s auditor general unveiled yesterday.

The former director of international education and workplace training in Calgary’s Bow Valley College is currently being investigated by police, said auditor general Fred Dunn. Dunn said the man allegedly created a number of “phoney contracts” for services that were never delivered to the college between July 2005 and November 2008.

“What this says about any organization is that you can be victimized if you do not pay attention to your controls,” said Dunn.

“Quite often in any fraud, an individual will start very small and once they have proven that the process works without any questions, they will become bolder over time.”

Dunn said Edmonton’s Grant MacEwan College is exposed to continued risks of fraud and errors that will go undetected.

“We’ve been concerned about (Grant MacEwan College) for a number of years,” said Dunn. “We are concerned about the culture within the college.”

The general also uncovered the college did not recover $738,000 in parking fines at the college from 1999 to March 2008 because of “poor documentation and processes.”

The auditor general, meanwhile, also discovered two computer “penetration” attempts on the Department of Transportation after his office gave a scathing review of the government’s computer security practices last fall.

Dunn said contract workers hired by Service Alberta accessed a bad website in one of the two cases and downloaded a malicious computer program while trying to update some systems.

An investigation did not identify any evidence that an attacker exploited the government’s computer systems.

A detailed review on the government’s computer systems is expected in 2011.